What is Bottleneck Analysis? Key Principles of Bottleneck analysis.

Bottleneck Analysis

An operation in a sequence of operations whose capacity is lower than the capacities of other operations in the sequence.

• Smallest throughput rate
• Longest cycle time

The capacity of the bottleneck operation limits the system capacity

7 Key Principles of Bottleneck analysis:

1. The focus is on balancing flow, not on balancing capacity.
2. Maximizing output & efficiency of every resource will not maximize the throughput of the entire system.
3. An hour lost at a bottleneck resource is an hour lost for the whole system. An hour saved at a non-constrained resource does not necessarily make the whole system more productive.
4. Inventory is needed only in front of the bottlenecks to prevent them from sitting idle, anything else should be avoided.
5. Work should be released into the system only as frequently as the bottlenecks need it. Bottleneck flows should be equal to the demand.
6. Activation of non-bottleneck resources cannot increase throughput, nor promote better performance on financial measures.
7. Every capital investment must be viewed from the perspective of its global impact on overall throughput (T), inventory (I), & operating expense (OE)